Small and Medium Enterprises (SMEs) have been disproportionately impacted by the Pandemic. More than 6.5 million jobs could be lost in the UK alone due to the economic fallout from COVID- 19 according to the University of Essex. Restarting economies will require a vibrant and growing SME sector, yet many countries are struggling to get funding to SMEs. Can the innovation acceleration seen during the COVID-19 pandemic also accelerate the development of alternative methods for social payments and fundraising alternatives for SMEs?
SMEs employ 60% of the UK workforce. On a global global scale, there are 400 million SMEs propping up 60% of the economy. Who are our job creators, who are engines of growth globally, and how do we amplify those messages and use our modern day technologies thought processes to create new systems to change the paradigm and start to move the globe from one of scarcity to surplus. Now is the time to innovate! COVID has shaken us to think radically differently, and we need new economics. How can governments and others create incentives for people to develop new paradigms, tools, or even just better ways to do things. We’re at a time where we can think about how technology can really help SMEs because they’re critical to our economies. How can we use new digital tools to help us do that fast, cheaply and well?
COVID-19 has shone an uncomfortable light on existing social and economic inequalities. We have the real polarization of the haves and have nots. The S& P 500 is dominated by four companies which make up 20% of the capitalization – Microsoft, Amazon, Apple and Google. The people of the world are getting poorer, and the wealthiest are getting wealthier and it’s just not right. Something is fundamentally flawed in our economic system, that values growth over all other indicators. The people who enable this growth are not valued for their contribution and their value is diminished through the term “consumers,” when in fact they are the engine of the economy and are the true “contributors. When we start to think about a consumer as a contributor to the organization and to our economies, it enables us to refocus.
We need a better way for money to function and value to be transferred. This technology exists, technology that would tokenize value, not money. We need to devise ways that we can get money into the accounts of these businesses and give them the skills and give them the support that they need. We get them through this crisis, and we get them to where they need to be, or we will lose 60% of the economy. So what is stopping us?
Even though SMEs make up 60% of the economy, for the last 30 years, SMEs have been treated as not enough, or ambitious enough. Why aren’t you Google? Why aren’t you becoming Amazon? Yet, SMEs are about sustainability, and about creating jobs and there is no SME lending. SME lending is seen as secondary.
We’ve seen massive growth in crowdfunding and peer to peer lending because there’s been a natural flight to other options, because it’s so difficult to obtain loans through the legacy system. Crowdfunding is valuable, however, the trouble is there’s no exit routes unless the company is really successfully sold. What is needed is to match what businesses need, with what investors want and that for business to grow. Investors want to share in that growth in the business and historically that’s being done through dividends. However, if you actually have a system, a scheme whereby investors are able to participate in the growth of the business, this is the right direction because the people that have got the money and there are literally billions in the UK .
We need a reset
Local economies need local businesses. Governments and local governments should be social public service providers. There needs to be a community coming together to help each other through the mountains. We need to have localism and local economies and local crowds. Do you know that that’s a fundamental on local investment.
We don’t value this segment of our economy enough to think about how we nurture them. We’re at a time where we can really think about how technology can help SMEs because they’re critical to our economies. There are some really interesting projects happening out there, and this crisis is actually shining a light on those projects and how they can help move our economy forward.
If we don’t get there in the UK, 43% of SMEs will fold in three years. Give SMEs digital skills. Let’s think about how we enable it. 83% of UK SMEs that don’t know how to sell digitally, or get digital so their business can thrive and grow while we go through this period of social distance. Let’s value the local hairdresser. Let’s value the local businesses. We don’t necessarily need them to become Google, but we need them to exist. This is a pivotal point in history. COVID-19 has shaken us to realize that we can think radically differently. What we need is new economics, one which values people and the planet not just economic growth. Now we have to move to balance. We have to do it. We only have one planet.
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Contributors: Vince Molinari (Moderator): Founder Fintech.tv; Jonny Fry: Team Blockchain; Lee Birkett: Founder JustUs; Sorcha Mulligan: FinTech & Blockchain Supply Chain & Trade Finance Platforms Specialist; Barry James: Founder British Blockchain and Frontier Technology Association: Victoria Thompson: IP & IT Lawyer and Board Advisor ; Jane Thomason , Fintech.tv